Express Tanks After Giving Poor Guidance

Retailer Express (NYSE: EXPR) released its 2013 guidance Wednesday, and has taken a beating on Wall Street because of it.

The Columbus, Ohio-based apparel chain expects to come in significantly below expectations during the first quarter. While Wall Street wants to see an EPS of $0.46, Express anticipates earnings of $0.34 to $0.38 per share.

Full-year results are also expected to come in below the mark. Express expects to post an EPS of $1.40 to $1.56. Even at the high end, this figure will fall short of the $1.58 analysts want to see.

Positive Fourth Quarter and 2012 Earnings

The news isn't all bad for Express. While the company's guidance is paltry, its fourth quarter and 2012 earnings closed above estimates.

Fourth quarter EPS climbed 10 percent year-over-year and finished at $0.75. It also narrowly edged analysts' expectations of $0.74 per share.

Revenue for the quarter finished up eight percent year-over-year at around $729 million. This figure topped the Wall Street consensus by about one percent.

Full-year EPS rose one percent year-over-year and finished at $1.60 -- slightly above the $1.58 analysts hoped for.

Total revenue came in at around $2.15 billion -- an increase of almost four percent from 2011. This was about on par with the Wall Street consensus of $2.14 billion.

Comparable Store Sales Flat

Comparable store sales grew by 1.5 percent during the fourth quarter.

However, for the year, this figure remained flat.

International Expansion

Express, which has identified international expansion as “one of the company's four pillars of growth and a significant long-term revenue opportunity for the company,” made strides in this area in 2012.

In August, the company announced that one of its subsidiaries entered a franchise agreement with Fastco Commercial S.A. -- a franchise operator in Central and South America. Under the agreement, over 30 Express stores will be opened in 10 nations in this part of the world over a five year period.

And, in 2012, Express opened five new stores in Canada. Its franchisees opened eight other international locations, as well.

Express now has 22 locations outside the US including ten in Canada, four in Saudi Arabia and four in the UAE. The company also has locations in Kuwait, Mexico, Panama and Peru.

Market Reaction

After hovering in the $18 to $19+ range for most of the past two months, Express has dropped below $17.50 in the morning hours on Wednesday. It is at its lowest point since late-January.

Express is down around eight percent on Wednesday.

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